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India's office market saw steady growth in the past quarter, with gross leasing across seven major cities rising 15 per cent year-on-year to 18.3 million sq ft, according to Colliers India. Strong demand from occupiers and the continued expansion of Global Capability Centres (GCCs) supported leasing activity despite global uncertainties. Bengaluru remained the top contributor, while Hyderabad and Pune recorded sharp growth. However, Delhi-NCR and Chennai saw a decline in leasing volumes. The data reflects a mixed but overall resilient office market, with demand concentrated in key technology-driven cities.
India's office real estate market recorded stable growth during the past quarter, with total gross leasing across seven major cities increasing by 15 per cent year-on-year to 18.3 million sq ft, as per data released by Colliers India. The data covers the January-March period of the current calendar year and highlights continued demand despite global economic uncertainties. Advertisement
The consultant indicated that the momentum in leasing activity was driven by steady occupier demand across sectors along with the continued expansion of Global Capability Centres (GCCs) in India. These centres, which have been scaling up operations in recent years, have played a key role in sustaining office space absorption, especially in technology-focused markets.
Among cities, Bengaluru remained the largest office market, recording an 18 per cent increase in leasing to 5.3 million sq ft, compared to 4.5 million sq ft in the same period last year. The city has consistently led office demand due to its strong IT and startup ecosystem, along with a high concentration of GCCs.
Hyderabad witnessed a sharp rise in activity, with leasing volumes doubling to 3.4 million sq ft from 1.7 million sq ft. This growth reflects the city's increasing attractiveness for technology firms and multinational occupiers.
Similarly, Pune recorded significant growth, with leasing more than doubling to 2.5 million sq ft from 1.2 million sq ft. The city has been emerging as a strong alternative office hub due to cost advantages and infrastructure improvements.
In Mumbai, office leasing rose 23 per cent to 2.7 million sq ft from 2.2 million sq ft, indicating sustained demand in the financial capital, particularly from BFSI and corporate occupiers.
However, not all markets performed similarly. Delhi-NCR saw a 30 per cent decline in leasing activity to 2.3 million sq ft from 3.3 million sq ft. Chennai also recorded a 31 per cent drop to 2 million sq ft compared to 2.9 million sq ft a year ago, suggesting a temporary slowdown in occupier activity in these regions.
Leasing activity in Kolkata remained unchanged at 0.1 million sq ft, indicating limited expansion in that market during the quarter.
The consultant clarified that gross leasing or absorption figures exclude lease renewals, pre-commitments, and transactions where only a letter of intent has been signed. This ensures that the data reflects actual concluded deals during the period.
Source PTI
FAQ
Q1: How did India's office leasing market perform in the latest quarter?
India's office market recorded a 15% year-on-year growth in gross leasing, reaching 18.3 million sq ft across seven major cities. This indicates steady demand despite global economic uncertainties and reflects continued confidence among occupiers.
Q2: What factors are driving office space demand?
The growth is largely supported by strong occupier demand across sectors and the expansion of Global Capability Centres (GCCs). These centres continue to scale operations in India, contributing significantly to office space absorption, especially in technology-led cities.
Q3: Which city led office leasing activity?
Bengaluru remained the top contributor, with leasing rising 18% to 5.3 million sq ft. Its strong IT ecosystem, startup base, and concentration of GCCs continue to drive consistent demand for office spaces.
Q4: Which cities saw the highest growth?
Hyderabad and Pune recorded the sharpest increases, with leasing volumes more than doubling. This growth reflects rising interest from multinational firms and cost advantages compared to larger markets.
Q5: How did Mumbai perform in this period?
Mumbai saw a 23% rise in leasing to 2.7 million sq ft, driven mainly by demand from BFSI and corporate occupiers, indicating continued strength in the financial sector.
Q6: Which markets witnessed a slowdown?
Delhi-NCR and Chennai experienced declines of 30% and 31% respectively, suggesting a temporary slowdown in occupier activity or delayed decision-making in these regions.
Q7: What was the trend in Kolkata's office market?
Kolkata recorded stable leasing at 0.1 million sq ft, indicating limited expansion and relatively subdued demand during the quarter.
Q8: What does gross leasing mean in this context?
Gross leasing refers to the total volume of office space leased through completed transactions during the period. It excludes lease renewals, pre-commitments, and deals where only a letter of intent has been signed, ensuring the data reflects actual concluded agreements.
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